Barack Obama

We live in an unnatural and monstrous economy. A Frankenstein creation… This creation owes its wretched life to the efforts of a relatively small number of international bankers, corporate financiers, and of course, the private Federal Reserve; the mad scientists of our age, consumed with a lust for power over everything. One day, in the distant future, we will finally understand and appreciate their “brilliance”, or so they tell themselves. The “plan” is simply too complex and wondrous for we nearsighted and frightened villagers to comprehend. In fact, the plan is very easy to comprehend, and not driven by brilliance, but hubris (one does not necessarily lead to the other). The key to grasping the mangled workings of our economy lay in the lifeblood of our commerce; the dollar itself. If you know the dollar, you’ll know just about everything else. Ignore the dollar, or assume comprehension without ample study, and you will find yourself completely lost in the fog and chaos of the markets.

Update 2: State Department official says Clinton would not even take World Bank job if it was offered - CBS News

Update: NBC WIRE: From Philippe Reines, a Clinton spokeman: "It's 100% untrue, Reuters is wrong. That's on the record."

Phew, that was scary...

We are surprised that the "recidivist rapist" post-DSK PR backlash took so long. Yet it is now here. From Reuters:

• Secretary of State Hillary Clinton has been in discussions with the
  White House about leaving her job next year to become head of the World
  Bank, sources familiar with the discussions said Thursday.

Far more importantly, another rat leaves Obama's sinking ship. In the meantime, feminists everywhere rejoice, because, you know, Hillary, extremely experienced in economic, bankruptcy, and other financial issues is a woman.  Next up: Oprah seeks to run the Bilderberg group, in order to give it a more "streamlined", humane appearance and Rachel Maddow in rumored to run the Trilateral Commission. Obviously, Erin Burnett is a shoo in for the CFR. And yes, the world has now officially gone crazy.

It just never changes:

• OBAMA AIDES SAID TO DISCUSS EMPLOYER PAYROLL TAX BREAK
• PAYROLL TAX BREAK FOR EMPLOYERS AMONG IDEAS TO BOOST HIRING
• ADMINISTRATION CONSIDERING MEASURES AS RECOVERY SLOWS

Bolded bullets aside, good luck passing another fiscal stimulus Dear President when you can't even issue debt without stealing money from government retirees.

In case anyone was wondering why Goolsbee was the latest sacrifice at the altar of public discontent with Obama's economic "policies" here it is: "Americans' disapproval of how President Barack Obama is handling the economy and its growing budget deficit has reached new highs amid broad frustration over the slow pace of economic recovery, according to a Washington Post-ABC New poll released on Tuesday. The ratings Obama's approval rating bounced to 56 immediately after bin Laden was killed last month. Fifty-nine percent, a new high, gave Obama negative marks for his handling of the economy, up from 55 percent a month earlier. Obama's approval rating on the deficit issue hit a new low of 33 percent, down 6 points since April. The state of the economy poses a huge challenge for the president, whose re-election in 2012 may depend on his ability to convince voters that his economic policies have been successful." Unfortunately Goolsbee's departure means that the one sacrificial lamb left in the Obama economic circle (now that Mark Zandi seems a shoo in for at least one position on Obama's staff), Tim Geithner, will be kept in Obama's back pocket until QE 3 (which will come - Obama has nothing else left up his sleeve) proves to be an abysmal failure and be fired once the Fed's balance sheet hits about $4 trillion, roughly $1.3 trillion higher than where it is now.

Moody's reputation for leaking inside information is well-known: after all it was one of its own employees, Deep "Throat" Shah, who leaked to infamous hedge fund Galleon information of upcoming LBOs. But at least that wasn't information originating from Moody's: the world's most incompetent rating agency was merely a conduit. Yet we were little surprised to learn that the firm that facilitated the housing bubble, and where such apparatchiks as Mark Zandi reside, informed none other than House Minority leader Nancy Pelosi that it likely wouldn't downgrade the US debt as long as several weeks ago. Per Dow Jones: "Moody's earlier Thursday took the unusual step of warning that it might place the U.S. government's debt rating under review for a possible downgrade. The agency said the review would come if Congress doesn't make progress on raising the country's debt ceiling. Pelosi said she was alerted to the Moody's report just after House Democrats met with President Barack Obama at the White House. She said a few weeks ago she was in New York and the head of Moody's told her that it "would probably not downgrade, so this is interesting news today," she said. "But the fact is we cannot default" on the debt." We are relieved to learn that the head of Moody's, a firm which only last summer received a Wells Notice from the SEC, in an investigation which was promptly scuttled by powerful and rich people, takes its responsibility of protecting material, non-public information with such passion. Yet it is the topic of another leak of non-public information, and not Moody's criminal incompetence, that bothers us. Because as we noted last week, it is now proven scientifically that members of both Congress and Senate (especially democrats), tend to trade a littel too much on inside information. And even if not Ms. Pelosi, who precisely will guarantee us that Ms Pelosi's husband, multi-millionaire Paul Pelosi who just happens to be the owner of Financial Leasing Services, Inc., a San Francisco, California-based real estate and venture capital investment and consulting firm, did not procure the Moody's inside information courtesy of wagging tongues at Moody's and in his wife's mouth, and then proceed to trade accordingly. Alas, with the regulator in charge being the same one who let the whole Moody's investigation get deadended in record time, we are not hopeful of getting any information or justice. Ever.

That's what makes oil trading so much fun - it's all based on factors that are out of our control and half a World away, so the speculators have dozens of tools available to them to manipulate the market.

Following electoral upheavals in Portugal, Germany and Finland, it is time to add Italy to the list, after Silvio Berlusconi's center-right coalition appears to have lost the critical election in Italy's financial capital, Milan, which also happens to be the center of the Bunga Bunga man's business and media empire. And while the mayoral election is merely symbolic for now, its outcome has substantial consequences for Italian governance (and thus stability): "With most votes already counted, leftist Giuliano
Pisapia was set to capture Milan city hall with some 55 percent of the
vote against around 46 percent for outgoing center-right mayor Letizia
Moratti. The local elections were seen as a referendum on the billionaire prime minister. "This is the first defeat for Berlusconi's center-right coalition since they came back to power, and it sends a clear signal of voters' disillusionment," said Maurizio Pessato of pollsters SWG. "These results make early elections more likely, possibly next year, and I don't see any chance of meaningful economic reforms being implemented by a lame duck government." As is by now known, while Spain has recently reentered the bond vigilante's scope after its bonds have continued to traded near record highs, Italy has so far been spared. That will change soon: "Italy is the only euro zone economy in which, taking account of inflation, citizens are poorer on average than they were 10 years ago. Berlusconi's government last month cut its growth forecast for this year to 1.1 percent from 1.3 percent and cut next year's outlook to 1.3 percent from 2.0 percent. S&P's lowered its credit outlook on Italy this month due to its weak growth and failure to adopt reforms, although worries of an immediate impact on the markets eased after the Treasury sold long-term bonds near the top of its target range Monday." Will this be the catalyst that is seen as "change" to the status quo by enough bond holders that Italy becomes that last peripheral European domino to fall?

59 percent of all Americans now receive money from the federal government in one form or another... is there any hope?

You’d think that the world’s largest economy (and home of the world’s reserve currency) exceeding its debt limits would be big time news. But we’ve yet to hear a peep about it from the mainstream financial media. It’s even stranger that we haven’t heard mention of the fact that the US is in fact RAIDING pension funds to continue to fund its debt.

Israeli Prime Minister Benjamin Netanyahu is set to address congress in a widely expected speech, the key focus of which will be to diffuse the situation following the president's remarks from last week over what the appropriate borders for the Israeli state should and should not be. As Reuters reports: "When Israeli Prime Minister Benjamin Netanyahu addresses Congress on Tuesday, many will be watching to see whether he escalates a war of words with the White House over how to make peace in the Middle East. Netanyahu has a mostly sympathetic ear in Congress, where few lawmakers in either party speak up for the Palestinians, hewing to decades of close U.S.-Israeli ties. But the Israeli prime minister has had a rocky relationship with President Barack Obama, and last week said the president's vision of a Palestinian state based on the borders of 1967 could leave Israel "indefensible."" Watch the full thing below.

Just because the US is having so much success convincing the world its debt is money good (but don't anyone dare count the $6+ trillion in GSE debt to the total US debt), the good old US of A has now decided to backstop the debt of... Egypt. Bloomberg reports: "Egypt plans to raise $1 billion by selling Eurobonds this year to diversify borrowing and finance a widening budget deficit after its economy was rocked by the worst political crisis in 30 years. The five-year bonds will be backed by a U.S. “sovereign guarantee,” Finance Minister Samir Radwan said by telephone from Cairo today...President Barack Obama promised last week $2 billion in loan guarantees and debt forgiveness." And when it comes to Uncle Sam giving his assurances to the developing world, size does not matter: "The size is not significant but the backing from the U.S. will help raise the money at a relatively inexpensive cost." Uh, should Congress perhaps have something to say about the fact that America is now somehow the guarantor of recently revolutionary African countries? Because if, heaven forbid, should the extremely stable and economically viable, but otherwise revolutionary Egyptian country suffer default and bondholders demand to be made whole, guess out of whose pocket the deficiency claims will have to be funded...

US President Barack Obama and First Lady Michelle Obama have arrived in Moneygall, Ireland, officially, for a short visit and to visit his ancestral home. Follow live coverage here. Good thing the world is not imploding in the meantime.

A week ago Die Welt reported that, in what may soon be a repeat of the Cuban missile crisis, US arch-enemy Iran, following a secret agreement signed on October 19, 2010 of strategic cooperation, Venezuela has allowed Iran to commence construction of a missile base on Venezuelan soil. The base, which will be located on the northernmost peninsula de Paraguana, 120 kilometers from the Colombian border, has recently been visited by a group of leading engineers from the Iranian Revolutionary Guard-owned construction company Khatam al-Anbia, is unofficially designed "to help develop an infrastructure to protect against air attack. Also planned is the construction of a command and control station, residential areas, watchtowers, and bunkers, in which warheads, missile fuel and other items can be stored. In cooperation with its Venezuelan partners, Iran also intends to build missile silos at a depth of about 61 ft." The project appears to be funded by Iran: "Information gathered by Die Welt also suggests that on their visit to
Venezuela, members of the Iranian delegation carried cash in their
luggage for the project’s initial funding. Western security circles
suspect that this involved tens of millions of dollars siphoned off from
Iran’s burgeoning oil profits." But most importantly is the discovery that while presumably defensive, Venezuela has told Iran, that it will be granted use of the base when completed: "According to the secret agreement between the two countries, Venezuela
pledged to Iran that it will be able to strike its enemies from the
joint missile base. Iran is attempting to boost its strategic threat to
the U.S., similar to the Soviet strategy in Cuba during the 1960s." And while skeptics may say that the base located about 2,400 miles from DC has no chance in striking the US capitol, the reality is that the Iranian long-range ballistic missiles Shahab 5 and 6, are rumored to be a three-stage system, which has a range of anywhere between 3,000 and 10,000 miles. So with missile base supplies most likely to come by sea (Venezuela is a few hundred miles away from Cuba), is a recreation of the 1961 Cuban missile crisis the next big political diversion?

This essay does not question whether Bin Laden and Al Qaeda attacked us on September 11, 2001, or whether Iran, Saudi Arabia or another nation-state had a hand in the attacks. It focuses solely on a peripheral issue regarding the third building which fell on that terrible day

We are about to experience the consequences of decades of really bad decisions.